Energy Efficiency | January 9, 2020
4 Key Insights for Understanding Utility Incentives
The framework for understanding utility incentives is simple: utilities want commercial/industrial businesses to use energy efficiently and they are willing to subsidize the process, meaning there’s money available to fund energy efficiency initiatives. Easy. The harder part is qualifying your own projects for those available financial resources.
That’s why we created this guide, to walk you through key insights into how utility incentives work and what kinds of projects you should consider that will qualify for this funding.
4 reminders about utility incentives
1. Appreciate the history of the energy efficiency movement
In this step, we outline the fundamental building blocks of energy efficiency growth in the US. Starting in the 1970s, energy efficiency fundamentally changed how commercial/industrial facilities approach operations.
While there are lots of policies and procedures in place to help companies become more energy efficiency, the bottom line is that these building retrofits aren’t free. That’s where utility incentives come in.
2. Understand the development of utility incentive programs
“Utility incentives” can be a broad term, ranging from subsidized efficient equipment to lower cost per kWh and checks cut directly from a utility. We explain how these programs came to be and which you’re most likely to encounter.
It’s important to realize as well that these incentive programs can vary greatly by region, so doing your research will matter as you work to obtain funding for your own projects.
3. Learn how today's tiered incentive dollar systems work
Just because your project is improving energy efficiency in your buildings doesn’t mean it’ll qualify for the utility incentive funding. This starts getting in the weeds of how utilities incentivize projects based on how efficient the end result is.
This is a really important step in the process if you want to obtain the most dollars available to you. Sometimes a larger initial number on paper will end up a smaller capital investment by the time the project is completed and the incentives are secured.
4. See it in action with examples of projects that "leveled-up"
Of course, the hypotheticals remain elusive without concrete examples. So, that’s what we provide in step 4! Reading through real-life projects illustrate how actual commercial/industrial facilities are designing and implementing projects to “level-up” between utility incentive tiers and obtain game-changing funding for better operations.
The basic project types we’ve seen get this kind of funding are LED lighting upgrades, HVAC refurbishments, Building Management System integrations and data center optimization – typically, some combination of all four will get you the most bang for your buck.
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